Over the last two decades, satellite communications has captured the interest of diverse commercial users. The interconnections provided by satellite networks permit an economical and reliable transmission of voice, television, and data.
In one sense, a satellite system is a microwave radio system with a single repeater--the transponder in outer space. In another sense, satellites have a broadcast capability that is not easily duplicated with conventional land-line techniques. Broadcasting means that transmission from an earth station to a satellite can be relayed back to earth, addressed so that many earth stations can receive the transmitted message at the same time. This capability has made satellite television a recent success.
Due to technological advances in developing both launch vehicles and the satellites themselves, it has become possible to place into orbit larger satellites with expanded capacities for transmission to and from earth stations. In addition, the size and cost of earth stations have decreased to a point where user-owned earth stations are now a practical consideration for a business enterprise.
Satellite communications systems have distinctively different cost characteristics when compared to terrestrial communications systems. For example, the distance of transmission is not as large a factor as in communications systems that use transmission lines. Further complications in costing satellite communication are associated with shared versus private networks. With a shared network, the satellite customer relies on "hub" earth stations (receiving and transmitting antennas and related equipment) that are shared with other users of the same satellite. The links to the customer's premises are accomplished with telephone company interconnections. With a private network, the earth station is installed at the customer's site. This customer-owned earth station is connected by cable to the customer's on-premise communications network and further connections may be made to off-premise.
Satellite network providers typically lease bandwidth from a satellite operator, and then provide their customers with the equipment and services for the customer's network. These network providers base their fees on a multitude of factors. Just a few of the pricing considerations are: whether the hub earth station is shared or private, traffic or baseband equipment requirements, the bandwidth and power consumed on the satellite, antenna characteristics such as model and size and related equipment, and post-installation service. Added to this complicated set of pricing factors, is the fact that each customer's needs are unique. The task of designing and pricing a network system is a difficult one.